Former captain and teammate Andrew Flintoff said this week it was time for the England team management to be ruthless and drop the under-performing Collingwood from the Ashes-winning team.

But Collingwood didn't even wait until the end of the Sydney Test, scheduled to finish on Friday, and made his announcement before the start of the fourth day's play.

While he will no longer be a part of Test cricket, Collingwood will remain as England's Twenty20 captain and play for the one-day team, the England and Wales Cricket Board said.

"I'm proud of the fact that I've always given my all for the England Test team," Collingwood said in a statement.

"But I feel that this is the right time to leave Test cricket, having reached some very special achievements, none more satisfying that retaining the Ashes in Australia.

"I also feel now is the time to ensure some of the younger players are given an opportunity at Test level as we have a wealth of talent pushing for places in the England Test team."

One of the chief beneficiaries of Collingwood's decision could be Eoin Morgan, 24, who has been on the sidelines during the Australian series.

In-form Ian Bell, who broke through for his first Ashes century with 115 in England's first innings in Sydney, is also in line to move up the batting order from six to five in a reshuffle.

Collingwood told his teammates of his decision on the field ahead of Thursday's fourth day in the Sydney Test and was given hugs and pats on the back by the England players.

"Representing England at Test level has always been a dream of mine and I've been fortunate enough to have enjoyed some amazing highs throughout my Test career," Collingwood said.

"Clearly I still feel I have a huge amount to offer England in terms of limited overs cricket and I'm looking forward to the opportunity to continue leading the Twenty20 squad and playing a significant role in England's ODI team."

Collingwood made his Test debut in 2003 against Sri Lanka at Galle and has earned 68 caps.

The Durham right-hander has scored 4,259 runs in Tests at 40.95 and taken 17 wickets.

Collingwood led England to their first-ever success in a global tournament when his team defeated Australia by seven wickets in the World Twenty20 final in Barbados last May.

Hugh Morris, Managing Director of England Cricket, said: "Paul Collingwood has made an outstanding contribution to the England Test team.

"His performances have been admired and recognised by his teammates and England supporters over many years and his tireless commitment in the Test match arena will be something he will always be remembered for.

"I'm delighted that Paul will be available to continue to make important contributions to our ODI and Twenty20 teams."